Florida’s one-way attorney fee system favoring plaintiffs in litigated insurance claims should be abolished, the time to file a litigated claim should be limited to one year and assignments of property insurance benefits ought to be banned entirely, an insurance industry insider says.
Kevin Comerer, a lobbyist with Rubin, Turnbull & Associates and a former legislative director for a Florida insurer, said in an opinion piece that state lawmakers should move forward on the reforms during a planned special session on property insurance. That session is expected to get under way during the week of Dec. 12, Comerer told the Florida Record.
“In short, this crisis starts and ends with litigation,” he said in the op-ed.
Comerer pointed to several key issues that have rocked the Florida property insurance industry in recent years, including the tripling of premium costs for average homeowners, nine insurers going insolvent in two years and state-run Citizens Property Insurance Co.’s policies spiking from a low of 420,000 to more than 1 million this year.
“We’ve had about dozen insurers go insolvent” over the last several years, Comerer told the Record. “It had nothing to do with storms and Mother Nature. It had everything to do with lawsuit abuse.”
Though the Legislature has already eliminated the one-way attorney-fee provision for assignment-of-benefits (AOB) cases, lawmakers need to do more to normalize the industry by eliminating AOBs altogether, he said.
In addition, limiting the time property owners have to file a litigated claim to one year would also help to remove legal gamesmanship from the insurance market, according to Comerer.
“That will end these racketeers going out in a predatory fashion and trying to mine and manufacture claims and lawsuits because they have such a large timeframe to do so,” he said. “You have to nail that down.”
The state’s abusive litigation woes are apparent from litigation data, according to Comerer. In every other state in the union, the average number of insurance lawsuits is under 1,000 per year, but in Florida that number is 100,000.
A full AOB repeal may not come to fruition this year, however. That’s because state lawmakers have already attempted to address a piece of the problem, Comerer said.
“I’m not as sure if that will get across the finish line,” he said. “... They did repeal one-way attorney fees as it relates to AOB during the last special session.”
AOBs will continue to be used in the health care field so that patients can work with their insurers for billing purposes, according to Comerer. But Florida attorneys’ application of AOBs to property insurance claims has led to contractors replacing entire roofs when only a few shingles were damaged and billing insurers for inflated costs, he said.